ByNoel Randewich, ReutersSeptember 11, 2013

A model wears a Samsung Galaxy Gear smart watch in Berlin on Sept. 4, 2013. Samsung has unveiled a highly anticipated digital wristwatch well ahead of a similar product expected from rival Apple. The so-called smart watch is what some technology analysts believe could become this year's must-have holiday gift.

San Francisco — Intel is working on a new line of ultra-small and ultra-low-power microchips for wearable devices like smartwatches and bracelets, a bid by the company to make sure it will be at the crest of the next big technology wave after arriving late to the smartphone and tablet revolution.

The new line of chips, called Intel Quark, will ship next year and include an ingestible version aimed at biomedical uses, Intel's president, Renee James, told reporters late on Monday.

The Quark chips will be five times smaller and 10 times more power efficient than some of Intel's Atom chips for tablets and smartphones, she said.

Intel, the world's biggest chipmaker, dominates the PC industry, but it was slow to adapt its chips to be suitable for smartphones and tablets.

Intel Chief Executive Brian Krzanich and James spoke on Tuesday at the company's annual developer conference in San Francisco, their first major public appearance since their promotion in May, when Paul Otellini stepped aside as chief executive.

Intel's focus on wearable computing -- a trend that for many Americans evokes images of Dick Tracy, the comic strip detective who sported a two-way wrist radio -- comes as Silicon Valley eyes sophisticated computerized watches with touch-screens and other high-tech features. Technology companies see wearables as a growth opportunity amid signs that explosive expansion in smartphones shipments since Apple launched its first iPhone in 2007 is receding.

Last week, Samsung Electronics launched the Galaxy Gear watch, and Qualcomm, an Intel rival, launched the Toq smartwatch in a bid to showcase its technology to potential manufacturers.

Krzanich, a three-decade Intel veteran seen as the company's manufacturing guru, has said that under his leadership Intel will give much more priority to its Atom line of mobile chips. In the past, Intel's most cutting-edge manufacturing resources were reserved for making powerful PC chips, with Atom chips made on older production lines.

Processors based on technology from ARM and made by Qualcomm and Samsung account for most of the mobile market.

Intel has shown some recent signs of improvement in mobile, progress Krzanich is keen to build on. The company has promised major performance improvements in its new Bay Trail chip for tablets.

The Bay Trail chip is based on Intel's new Silvermont architecture, which is the most extensive overhaul of its mobile processors to date, with improved performance and lower power consumption.